In January and February, the Chinese government issued new policies to lift certain restrictions on household registration (hukou), allowing citizens who meet specified criteria to obtain local hukou. Having local hukou is effectively a prerequisite for securing employment, healthcare, social insurance, education, and other government benefits; this has been the case since the issuance of the Regulations on Household Registration in 1958. The new policies aim to promote employment as authorities recently acknowledged rising unemployment of college graduates and migrant workers during the current economic downturn. Even though the new policies may benefit those with higher education and special skills, they continue the trend to exclude the majority of Chinese migrant workers. (For a discussion of China's household registration system, see section II--Freedom of Residence in the CECC 2008 Annual Report, including the Addendum: Recent Hukou Reforms (pp. 105-112); for a broader retrospective, see also the CECC October 2005 CECC topic paper on China's household registration system, and a chart on Chinese Hukou reforms as of 2004.)

National Policy

Article 2 of the State Council General Office's Circular Regarding Strengthening Employment for College Graduates issued January 19 (January 19 Circular) encourages college graduates to work in small- or medium-sized and non-state enterprises. According to the article, "each locality and city should abolish restrictions on local hukou" (excluding four municipalities: Beijing, Chongqing, Shanghai, and Tianjin) to encourage firms to hire college graduates without local hukou. The January 19 Circular also states that China's employment situation is "very grim" due to the current international financial crisis, and "each locality and relevant department should put the employment of college graduates as the top priority in the work of employment." Two weeks later, the State Council's Circular Regarding Completing Employment Work in the Current Economic Situation issued on February 3 referred to the January 19 Circular again when emphasizing college graduates' employment as a top priority for the government.

Shanghai Policy

Shanghai, as one of the four municipalities excluded from the January 19 Circular, issued the Trial Measures Regarding "Shanghai Residence Permit" Holders' Application for Shanghai Permanent Hukou (Trial Measures) on February 12. Article 5 stipulates that the applicant satisfy the following requirements: (1) hold a Shanghai residence permit for at least seven years; (2) participate in the city's social security system during the seven years while holding a Shanghai residence permit; (3) pay income tax during the seven years while holding a Shanghai residence permit; (4) have been employed as mid- or higher level professionals in the city; (5) and have had no violations of national or the city's population planning policy, administrative punishment or more severe criminal record, or other bad behavior. Even though Article 1 of the Trial Measures states that their purpose is to "deepen the city's household registration management reform," "perfect the residence permit system," and "attract talent," it appears that only fewer than 3,000 residents out of the 4,115,000 Shanghai residence permit holders may qualify and thus benefit from the new policy, according to a February 24 Xinhua report and a February 18 Beijing News report.

Reform with Discrimination

The Chinese government's new hukou policies come at a time when the government's primary concerns are the economic downturn and related social issues, including unemployment and "social stability." Even though the new policies aim to create employment, they exclude most migrant workers who do not have a college education or special skills, and are unlikely to bring fundamental change to the discriminatory nature of China's hukou system, according to Xinhua and People's Daily (via Xinhua) reports on February 17. As noted in the CECC 2008 Annual Report, China's hukou reforms have continued the trend to classify citizens into those with better education and skills and those with less education and fewer job skills, largely migrants or the so-called "floating population." For example, the Guangzhou city government in Guangdong province announced in February a new plan to manage the "floating population" in three categories for "public security," according to a February 21 Southern Metropolitan Daily report. This new plan drew criticism from the public for labeling the "unemployed" and the "poor" as "high risk populations" and thus in need of "strict management until [they] die," according to quotes from netizens reported in a February 23 Voice of America article. In the meantime, many local hukou reforms have taken place in other cities in Guangdong province, according to a February 24 Southern Daily report. There are also concerns about whether the new policies will be implemented because they are not compulsory, as a February 17 South China Morning Post (registration required) article and a February 18 National Business Daily article reported.